If the Cost Method Is Used to Account for an Investment

question 88

Multiple Choice

If the cost method is used to account for an investment in common stock, dividends received should be

• A) credited to the Stock Investments account.
• B) credited to the Dividend Revenue account.
• C) debited to the Stock Investments account.
• D) recorded only when 20% or more of the stock is owned.

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Definitions:

Percentage

A mathematical concept that represents a fraction of 100, used to express proportions and ratios.

Multigenerational Family

A family structure that includes members from more than two generations living together or in close proximity, such as grandparents, parents, and children.

Older Adult

An individual who is in the later stage of life, often defined as being 65 years or older.

Daughter-In-Law

The spouse of one's child.